Vivek Warrier in Financial Post on U.S. Bill Targeting Canadian Oilsands

Vivek Warrier comments in the Financial Post on a bill introduced in the U.S. House of Representatives that would impose an additional tax on Canadian oilsands crude. The bill looks to reverse a 2011 IRS ruling that oilsands crude is not technically considered crude oil and therefore not subject to an excise tax.

Vivek says the bill would be an additional burden as it will also tax the bitumen in the barrel. Energy oil producers are closely watching the bill—Vivek says the new excise tax would bring the total tax burden on every barrel of dilbit sold into the U.S. up to roughly US$0.09—a significant tax burden that companies may consider challenging under USMCA rules.

“There were great pains taken in negotiating the Canada-U.S. free trade agreement to ensure that bitumen would be freely moveable through the continent without having to pay any kind of tariff and certainly this excise tax could be interpreted as such,” Vivek says.